Recreational Marijuana Wars: Nevada Verses California

Photo Credit: Gary Reyes

Nevada’s neighbor to the west became the sixth U.S. state to kick off recreational marijuana sales on Jan. 1, just six months after the Silver State started sales last July.

Almost 100 dispensaries across San Diego, San Jose, Oakland and Berkeley are among California stores licensed to sell recreational marijuana. A study from the University of California, Davis, estimates the state’s industry, once fully operating, could be worth as much as $5 billion annually by 2020.

But higher total cannabis taxes, lesser legal availability per capita and lower testing standards could keep the black market healthy and prevent California’s industry from expanding, according to a Berkeley-based pot expert.

Chris Conrad, a court-qualified expert witness and professor at cannabis-focused Oaksterdam University, said California could be “years away” from reaching its pot-selling potential.

“The tax structure is currently set up in a way that will preserve the black market,” Conrad said. “Illegal vendors probably won’t be able to operate on the same scale that they have been, though.”

That’s a contrast to Nevada, where pot taxes reach up to 38 percent in the most heavily taxed municipalities, like Henderson and Las Vegas. Through four months of legal sales from July through October, the industry earned almost $127 million in sales and $19 million in tax revenue, according to data from the Nevada Dispensary Association. Is it possible for California’s cannabis industry to cut into Nevada’s? Here’s a look at how the two industries compare.

Will California’s industry affect Nevada’s?

Although California’s expanding marijuana industry is on pace to become significantly larger than Nevada’s market, Las Vegas business owners believe a larger pool of new customers curious to try the legal plant would outweigh the setbacks of losing California customers who may previously have traveled to Nevada.

Both Andrew Jolley of The Source and owner Armen Yemenidjian of Essence Cannabis Dispensary said at least 10-15 percent of their combined medical and recreational marijuana customers hail from California. About 27 percent of Las Vegas’ 42.9 million annual tourists are from Southern California, according to the Las Vegas Convention and Visitors Authority.

Are marijuana lounges on the horizon?

To set Las Vegas apart from other major U.S. cities that allow recreational marijuana, Nevada State Sen. Tick Segerblom said Las Vegas’ goal is to model its industry after Amsterdam, with lounges where people can use the plant in a controlled public space.

“We’ve learned from gambling that even while more states have allowed gambling, it hasn’t come back to hurt Nevada,” Seger-blom said. “We just want to make sure we’re always the gold standard for marijuana, and it’s always the best place to come use and enjoy the plant.”

Only Denver has made a serious push toward marijuana lounges in the past. Those efforts were held up by ambiguities in Colorado state law as well as dissent from local elected officials.

While the Las Vegas City Council and Clark County Commission discussed implementing marijuana lounges as early as spring, those plans were halted following a Jan. 4 memo from U.S. Attorney General Jeff Sessions that effectively rolled back Obama-era protections for weed-legal states.

“The memo caught a lot of people off guard, that’s the tough part,” said Bryan Scott, assistant city attorney for Las Vegas. “There are a lot of prominent citizens involved in this industry and it would be good to have some certainty.”

Both Scott and Clark County Commission Chairman Steve Sisolak said they plan to continue pursuing options for marijuana lounges after getting clarity from legal council.

Legal comparison

Purchase and Possession Limit

Us: 1 ounce of flower; 1/8 ounce of the THC equivalent of concentrates and edibles

Them: 1 ounce of flower; about 2/7 ounce (8 grams) of the THC equivalent of concentrates and edibles

State Recreational Marijuana Tax

Us: 10 percent

Them: 15 percent

Sales and Use Tax

Us: 8.25 percent plus a wholesale distribution tax of 15 percent

Them: 9.5 percent. Cultivators also pay $9.25 per ounce of marijuana flower sold and $2.25 per ounce of marijuana leaf sold

City Sales Tax

Us: Can vary from 2-4 percent

Them: Can vary from 3-17 percent

Personal marijuana plant limit

Us: 6 plants per person; 12 plants per household

Them: 6 plants per person

Price comparison

Marijuana-infused chocolate bar, 100mg THC, 12 pieces

• The Source (Las Vegas): $36

• Essence (Las Vegas): $33

• Inyo (Las Vegas): $36

• Balboa Avenue Cooperative (San Diego): $30

• Mankind Cooperative (San Diego): $24

• The Healing Center (San Diego): $29

Strawberry Cough Syringe (or similar), 500 mg, Concentrate

• The Source (Las Vegas): $44

• Essence (Las Vegas): $41

• Inyo (Las Vegas): $35

• Balboa Avenue Cooperative (San Diego): $41

• Mankind Cooperative (San Diego): $35

• The Healing Center (San Diego): $38

Blue Dream (or comparable flower), 1/8th ounce

• The Source (Las Vegas): $50

• Essence (Las Vegas): $48

• Inyo (Las Vegas): $55

• Balboa Avenue Cooperative (San Diego): $50

• Mankind Cooperative (San Diego): $40

• The Healing Center (San Diego): $47

Rove Haze Vape Cartridge (or similar), 1 gram

• The Source (Las Vegas): $116

• Essence (Las Vegas): $132

• Inyo (Las Vegas): $128

• Balboa Avenue Cooperative (San Diego):$106

• Mankind Cooperative (San Diego): $100

• The Healing Center (San Diego): $98